Abbott backs $75bn in cuts

Opposition Leader Tony Abbott has backed the implementation of Labor’s national disability insurance scheme but is set to take the axe to the Gonski school funding reforms to which only NSW has signed up. Photo: Rob Homer

The Coalition has identified at least $75 billion in spending cuts and tax increases over four years that it considers necessary to balance the budget, including the abolition of any family payment for having a baby and a ­backflip on its long-held opposition to ­cutting the private health insurance rebate.

Furthermore, the Coalition is backing about $13 billion savings Labor announced before the budget, but has yet to implement, including private health rebate cuts, and so far will block almost $6 billion in spending measures contained in the budget.

The Australian Financial Review has been told these spending measures include what is left of the baby bonus.

The budget controversially scrapped the baby bonus and instead replaced the $5000 payment per child with new payments to recipients of Family Tax Benefit A, available to low- and middle- income families. They will receive $2000 for the first child and $1000 for the second and subsequent children but it is understood that this, too, is in the Coalition’s sights.

“We can’t do it,’’ a senior source said, estimating a $2.5 billion saving over four years. He said any new spending measure in the budget that Mr Abbott does not specifically endorse, “stays on the table’’.

For example, a non-government school in NSW would be $800,000 worse off over six years and a government school $1.7 million worse off.

“They are the resources that could be used in schools for literary coaches, for extra teachers’ aides, for work that would improve the education of those school students,’’ she said.

“In the weeks to come and in the weeks that follow, I will be making it very clear to the Australian community what is at risk for Australian schools if our plan for better funding school improvement is not endorsed.

She said voters had to choose between letting the “current broken system limp on year after year’’ or the new plan to lift all schools by directing funding on a needs basis.

The decisions taken before the budget but not yet implemented or legislated for include two changes to the 30 per cent private health insurance rebate that were announced in last year’s mid-year budget update and will save $1.1 billion over four years.

Mr Hockey said “we don’t like the idea that you’re making it harder for people to contribute to their own ­private health insurance’’ but “we have to accept these things’’.

“We are prepared to do it because we have to build a stronger budget to build a stronger Australia,’’ he said.

Of the global figure of about $75 billion in savings, Mr Hockey said: “We’re counting them, we will do it if we have to.’’INTERACTIVE - DO NOT REMOVE

Health Minister Tanya Plibersek slammed the hypocrisy of the opposition for suddenly embracing a structural saving the government had long been advocating and said Mr Abbott had been humiliated.

“Mr Abbott’s position on private health insurance is completely dishonest,’’ she said.

“He has attempted to block the government’s sensible measures at every turn, while at the same time knowing that the growth in the private health insurance rebate . . . was completely unsustainable.’’

Row over freezing of super increase

Mr Hockey said another pre-budget saving the Coalition would implement if Labor did not was the introduction of monthly of PAYG payments for large companies, announced in the mid-year budget update. Slammed at the time by the opposition, the measure “saves” $8.3 billion over the forward estimates.

Treasurer Wayne Swan said on Sunday the increase from 9 per cent to 12 per cent was worth $500 billion to the national savings pool by 2037. Mr Abbott’s deferral would cost a 30-year-old $19,000 by the time they retired. If the Superannuation Guarantee did not rise again, the worker would be $127,000 behind at retirement.